Pricing & limits terms

Aggregate Limit vs Per Occurrence

Per occurrence is the max per single claim; aggregate is the hard cap on all claims combined for the entire policy period.

Attachment Point

The dollar amount of loss at which an excess or reinsurance layer starts to pay, once the coverage beneath it is used up.

Also: attachment point insurance · attachment point vs deductible

Coinsurance

A property-insurance clause requiring you to insure your property to a set percentage of its value (often 80–100%) or face a proportional penalty on claims.

Also: Coinsurance Clause · Coinsurance Penalty

Corridor Deductible

A deductible that sits between two layers of coverage, so you fund a band of loss in the middle of the program after a first level has already paid.

Also: what is a corridor deductible · corridor deductible meaning

Deductible / Retention

Deductible and retention are often used interchangeably — both refer to the amount your company pays out of pocket before the insurer covers the rest.

Also: Self-Insured Retention · SIR · Deductible

Exposure

The degree to which your business is vulnerable to a particular risk.

Gross Written Premium

The total premium an insurer or broker writes over a period before subtracting reinsurance, commissions, or other costs.

Also: gross written premium · GWP · gross written premium meaning

Loss Ratio

The ratio of claims an insurer pays out to the premiums it collects, used to gauge risk and pricing.

Also: Claims ratio

Loss Run Report

A formal record of all insurance claims filed on a policy during a specified period, used by underwriters to assess your risk history.

Also: loss runs · loss run · claims history report

Overriding Commission

An extra commission paid on top of the standard commission, usually to a managing agent or ceding insurer for producing and overseeing business.

Also: overriding commission · override commission · overrider

Policy Limit

The maximum amount your insurer will pay for covered claims.

Premium

The amount you pay for your insurance policy.

Premium Financing

Premium financing lets a business pay its insurance premium in monthly installments through a third-party lender that pays the carrier upfront, instead of paying the full premium in one lump sum.

Also: insurance premium financing · premium finance · premium finance agreement

Rating Factors (Cost Drivers)

The variables underwriters use to calculate your premium.

Replacement Cost

A property valuation method that pays what it costs to replace damaged property with new, without deducting for depreciation.

Also: Replacement cost value · RCV

Return Premium

Money refunded to you when your premium is reduced, your policy is canceled, or an audit lowers your exposure.

Also: return premium meaning · premium refund · return of premium

Self-Insured Retention (SIR)

An amount the insured pays directly on a claim before the insurance policy begins to respond.

Also: SIR · Retention

Sliding Scale

An arrangement where a commission or premium adjusts up or down based on the actual loss ratio of the business.

Also: sliding scale insurance · sliding scale commission · sliding scale meaning

Sublimit

A lower limit within your policy that caps coverage for a specific type of loss.

Total Insured Value (TIV)

The combined value of everything covered under a property policy, representing the maximum potential loss.

Also: TIV · what is tiv · total insurable value

Underwriting

The process insurers use to evaluate your risk and decide coverage terms.